IRDA lambasts Max Life Insurance ‘casual approach’ to insurance regulations - (28 Jun 2016)

MANU/IRDA/0019/2016

Insurance

The Insurance Regulatory and Development Authority of India imposed a penalty of Rs. 10 lakhs on Max Life Insurance Company, citing operational deficiencies and violations of various IRDA regulations.

Of the 17 charges pressed, the IRDA concluded several against Max, however monetary penalty was restricted for two. Penalty was imposed for adjusting the total amount received at proposal stage without honouring the policyholder’s choice of “mode of premium”, which resulted in non-adherence to “due dates of further premiums” mentioned in the policy schedule and led to consumers paying more than was required. The company was also fined for encouraging brokers to sell its products to certain prospective customers, which may not have been in the best interests of brokers.

Several of the charges related to violation of IRDA regulations pertaining to agents and brokers. The company was found to have indulged in inappropriate agent training practices, a significant part of the business was solicited through unlicensed persons, and extra payouts to individual agents and remuneration over and above commission rates prescribed.

Other matters investigated by the IRDA included failure to update records against the latest KYC documents of policy holders, failure to update the system with ‘better’ documents, relying instead on non-standard proofs, and incorrect treatment of liabilities in its books.

Relevant : Guidelines on Outsourcing of Activities by Insurance Companies MANU/IRDA/0013/2011

Tags : IRDA MAX LIFE PENALTY AGENTS